February 10, 2016

Bottom line: The January budget data represent a strong start to the year from the Treasury’s point of view. The surplus for the month stems from higher-than-expected tax receipts, with the driving force being the continued surge in vehicle purchases, on which very high import duties are levied, as well as VAT.

  • The budget surplus in January was NIS 3.9bn.;
  • The twelve-month trailing deficit through January was equivalent to 2.2% of GDP; the projected deficit for 2016 is NIS 35bn., equivalent to 2.9% GDP.
  • Revenues in January totaled NIS 27.4bn, compared to a projection of NIS 25.5bn — a surplus of NIS 1.9bn. Direct taxes were NIS1.3bn above their target and indirect taxes NIS0.7bn (after rounding).
  • After adjusting for changes in tax rates, tax revenues were 10% higher in real terms than in January 2015. Direct taxes were 4% higher and indirect taxes were 17% higher.
  • The surge in indirect tax receipts reflects continued high levels of vehicle purchases in January 2016, whereas in January 2015 purchases dropped off after a surge in December 2014.
  • Revenues on taxes on real estate rose 29% over January 2015.
  • Spending totaled NIS 23.8bn in January. Spending rose in both civilian and defence ministries over January 2015, reflecting increases in the 2016 budget, as well as the impact of the public sector wage agreement .


GRAPH: Tax Revenues, in NIS bn., 2008- Jan. 2015

The three charts show:

top — Total government tax receipts;

middle — receipts from direct taxes;

bottom — receipts from indirect taxes

The red dotted lines track monthly receipts on a seasonally-adjusted basis; the blue unbroken line tracks the trend data for each category.


Source: Ministry of Finance


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